RETURN TO SUSTAINABLE GROWTH OF UKRAINE’S ECONOMY AND RISKS OF FINANCIAL DESTABILIZATION
DOI:
https://doi.org/10.35774/jee2021.02.350Keywords:
macroeconomic stabilization, inflation targeting, structural reforms in Ukraine, macroeconomic and macrofinancial risks for Ukraine, public debt, international reserves, programme with the IMF.Abstract
The article presents a systematic analysis of the risks of the Ukrainian financial system and offers suggestions that encompass a set of structural reforms aimed at expanding its role in returning the country to sustainable development. It is shown that the national economy has not managed to achieve an outstripping pace of development like most «post-planned» economies of Eastern Europe. The main reason for this has always been a lack of strong and independent governmental institutes and, consequently, structural reforms. Reforms in the real economy have been substantiated in the scope of the energy sector in view of the transition to market rules and use of anti-monopoly measures. Considering the financial system, the author justifies a higher degree of operational independence for the National Bank of Ukraine as a regulator, its broader authority to regulate non-banking institutions, transition to commercial and state banks using standardized principles of deposit insurance, and mandatory calculation of borrower’s credit rating when approving loans. In view of the sizable state budget deficit, improvements to the pension system are examined. It is argued that its improvement must focus mostly on eliminating privileges, revision of the retirement age for some population categories, creation of non-state pension funds and their introduction to the financial markets.
JEL: E6, E66, F3, F33.
References
Adamyk, V., & Lebid, D. (2018). Inclusive development of Ukraine and international financial and technical cooperation for its activation [in Ukrainian]. Herald of Economics, 1, 56-72. https://doi.org/10.35774/visnyk2018.01.056
Adrian, T. (2021). An asynchronous and divergent recovery may put financial stability at risk. IMFBlog. https://blogs.imf.org/2021/04/06/an-asynchronous-anddivergent-recovery-may-put-financial-stability-at-risk/?utm_medium=email&utm_source=govdelivery
Ari, A., & Pula, G. (2021). Assessing the macroeconomic impact of structural reforms in Ukraine. IMF Working Papers, No. WP/21/100.https://www.imf.org/-/media/Files/Publications/WP/2021/English/wpiea2021100-print-pdf.ashx
Åslund, A. (2021, Jan 7). What is Ukraine's economic outlook for 2021? Atlantic Council. https://www.atlanticcouncil.org/blogs/ukrainealert/what-is-ukraineseconomic-outlook-for-2021/
Heyets, V. M. (2016). 25 years of reforms. What next? Economy and Forecasting, 2, 5-6. https://doi.org/10.15407/eip2016.02.005 https://doi.org/10.15407/eip2016.02.005
International Monetary Fund. (2020, Jun 11). Ukraine: Request for Stand-by Arrangement-Press Release; Staff Report; and Statement by the Executive Director for Ukraine. https://www.imf.org/en/Publications/CR/Issues/2020/06/10/Ukraine-Request-for-Stand-by-Arrangement-PressRelease-Staff-Report-and-Statement-by-the-49501
Kuznyetsova, L. I. (2019). Structural indicators to monitor macroeconomic misbalances in the investment sphere of Ukraine [in Ukrainian]. Economy and Forecasting, 4, 56-б9. https://doi.org/10.15407/eip2019.04.056
National Bank of Ukraine. (2021а). Inflation report. April 2021 [in Ukrainian]. https://bank.gov.ua/admin_uploads/article/IR_2021-Q2.pdf?v=4
National Bank of Ukraine. (2021b). Inflation report. January 2021 [in Ukrainian]. https://bank.gov.ua/admin_uploads/article/IR_2021-Q1.pdf?v=4
Petryk, О. І. (2019a). Ukraine and the IMF: Basic aspects of cooperation [in Ukrainian]. Economy of Ukraine, 5, 6-18. https://doi.org/10.15407/economyukr.2019.05.006
Petryk, O. I. (2019b). How to eliminate the main holes in the Ukrainian economy [in Ukrainian]. Dzerkalo tyzhnia. https://zn.ua/ukr/macrolevel/yak-usunutiosnovni-proboyini-ukrayinskoyi-ekonomiki-314556_.html
Petryk, O. I., & Deisan, I. M. (2018). Inflation and inflation expectation in conditions of satellite independence [in Ukrainian]. Visnyk Universytetu bankivskoii spravy, 3, 17-24. http://nbuv.gov.ua/UJRN/VUbsNbU_2018_3_5
Petryk, O. I., & Kuznyetsova, A. (2020). Macroprudential policy in crisis conditions [in Ukrainian]. Economy of Ukraine, 7, 55-63. https://doi.org/10.15407/economyukr.2020.07.055
Petryk, O. I., & Magdaliuk, O. V. (2018). Foreign investment in Ukraine: Current status and activation directions [in Ukrainian]. Visnyk Universytetu bankivskoii spravy, 2, 33-39. http://nbuv.gov.ua/UJRN/VUbsNbU_2018_2_6
Shevchuk, V., & Cherkas, N. (2019). Influence of Ukraine's foreign trade structure on economic growth in context of involvement in global value chains [in Ukrainian]. Economy of Ukraine, 2, 22-36. https://doi.org/10.15407/economyukr.2019.02.022
Shvets, S. M. (2020). Modeling the impact of public debt on economic growth in Ukraine [in Ukrainian]. Economy and Forecasting, 3, 146-156.https://doi.org/10.15407/eip2020.03.146
Received: April 15, 2021.
Reviewed: April 29, 2021.
Accepted: May 15, 2021.
Downloads
Published
How to Cite
Issue
Section
License
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
